Over £1m of loans with 2% cashback. Weekly Lending Review

Week 29: 14 – 27 July 2014

Last week we saw over 90 new lending opportunities come to the marketplace, including an A+ property loan for a development in Plymouth. It is nearly 90% funded with 3 days to go and has a fixed rate of 7.5%. A £400,000 fixed rate loan for a central London property development is also nearly funded. Both loans have 2% cashback* available for every successful bid, so get bidding before it’s too late!

New loans

There were 94 new business loans listed last week and there are currently 61 auctions on the marketplace.

The total value of the new listed loans was £5,036,120; that’s an average of £53,576 per loan. The largest loan value was £400,000 and the smallest loan value was £6,000.

Business loans still available for bidding on for the next 3 days or more:

Weekly marketplace trends

These graphs show the most recent activity on the marketplace. The average gross yield graph is reported weekly and shows a rolling two week average of gross yields. This calculation assumes you reinvest your interest each month and therefore includes the compound interest you earn. Number of loans and value of loans are reported weekly. The dates on the graph should be read as ‘week beginning’, for example: 21-Jul represents the week of 21st – 27th July.

Weekly average gross yield (2 weeks rolling)

yield

Number of listed loans per week

number

Listed loan value per week

value

Summer special: share £100 with a friend!

If you recommend a friend to Funding Circle and they lend at least £1,000 to businesses, you could each have £50 cashback* paid into your Funding Circle accounts.

Marketing tips from a Funding Circle borrower

We’re starting a new Marketing Tips series in partnership with Cognition Agency, which we hope will help businesses grow and provide investors with interesting material they can read and share. The first in the series is 5 trade secrets to improve email marketing.

Loans defaulted last week

Electrical business. Loan ID 1945

This Hertfordshire business has been trading since 1987 and is now in administration. The original loan amount was £100,000 and all affected investors have been notified.

Scaffolding business. Loan ID 3964

This Walsall business has been trading since 2008 and is in arrears with their repayments. The original loan amount was £50,000 and all affected investors have been notified.

Our collections and recoveries team are working to recover the outstanding amounts for all of these loans.

 

Enjoy lending, The Funding Circle Team

 

*Terms and conditions apply.

 

5 Trade Secrets That Will Improve Your Email Marketing

Email marketing is one of the most powerful ways small businesses can build relationships and grow. 76% of marketers use email more today than they did three years ago (HubSpot). This is hardly surprising, given the fact that email provides the most direct line of communication for conversion to sales. What’s more, it’s incredibly cost effective, with an ROI of around 4,300%, according to the Direct Marketing Association.

So, what’s the secret to getting your messages opened, read and shared with others?

Here are 5 trade tips to help you out:

1. Segment your database

The last thing people want is to have their time wasted by information they’re not interested in. It’s worth taking the time to segment your database and send relevant, targeted information to groups of people.

2. Carefully consider your subject line

The most common mistake people make is to spend lots of time on the email itself and then throw together a last-minute subject line. However, if no one opens your email it doesn’t matter what it says inside. Entice your recipient in the same way you would with an advertising headline.

3. Reward your readers

Once people have opened your email give them a reason to engage with you. How do you do this? By giving them something in return, such as a useful tip or link to a relevant guide or ebook.

4. Communicate the benefits

Don’t fall into the trap of headlining your product features. Instead, focus on the benefits that can be gained by working with you – always tell the recipient what’s in it for them.

5. Time your messages

Getting the timing right is crucial to your success. Saturday has the highest click-through rate at over 9%; 6am attracts the highest click-through rate of any hour, and most unsubscriptions take place on Tuesdays. The trends may be different for your industry, so experiment to find out what gives you the best results.

Effective email marketing is just one aspect of digital marketing. Once your prospects have clicked through to your website you need to provide them with the right information, in the rightway in order to convert them.

 

By Tim Witcherley, Cognition Agency

You can get more tips on digital marketing by downloading Cognition’s free eguide, Making The Most Of Online Channels To Generate Leads

Cognition is a full-service marketing agency and a Funding Circle borrower. It’s known for its commercial approach, linking marketing activity to revenue and growth.

If you’re interested in taking out a Funding Circle business loan to improve your email marketing, you can apply online at anytime.

Time to take a peer-to-peer loan?

The news today that small businesses are still struggling to access finance via traditional means, despite the more positive economic outlook, should comes as no real surprise for anyone who has been following business lending figures over the last few years. There has only really been one trend when it comes to high bank lending figures, and that has unfortunately been downwards.

The figures released by the British Bankers Association today show that borrowing by non-financial companies from high street banks declined in the year to June by £12.7 billion. Whilst it’s heartening to see that there was a small percentage increase in lending to small businesses in the wholesale and retail, accommodation and food, and real estate sectors, the percentage change remained below zero. Where we had previously seen some improvement in the manufacturing industry, with this being the only sector benefiting from positive increases in lending since October last year, this fell in June from ~10% to ~4%.

BBA lending stats June 2014

In comparison, business can typically access finance directly from investors via marketplaces like Funding Circle within two weeks. The application process is entirely online and can take as little as twenty minutes, and the credit assessment team will typically have a decision for you within 48 hours. On average it can take up to 15 – 20 weeks to hear from a bank – by which time the season may have passed, or the stock you needed to buy is no longer necessary as you weren’t able to take an important contract.

Today we’re publishing an infographic which shows just how fast a peer-to-peer loan can be for small businesses looking to grow and expand. If you have any questions, then just get in touch. Otherwise please feel free to share to help raise awareness of the choice that business owners now have when they are looking for finance.

If you’re a small business owner looking for finance, then why not put an application in now? Apply here.

Infographic final

Loans of £600k and your latest business video. Weekly Lending Review

Week 29: 7 – 13 July 2014

Last week was one of the best weeks for listings, as over £6.7 million of loans were available for you to lend to. We also announced that we have raised further funding to help improve your Funding Circle experience.

There are 2 loans on the marketplace with a value of £600,000 and above: both have a fixed rate of 7.5%, both are A+ risk bands and both have 2% cashback* on them. Place your bids quickly to take advantage of these loans!

New loans

There were 109 new business loans listed last week and there are currently 66 auctions on the marketplace.

The total value of the new listed loans was £6,770,600; that’s an average of £62,116 per loan. The largest loan value was £620,000 and the smallest loan value was £5,000.

Business loans still available for bidding on for the next 3 days or more:

Weekly marketplace trends

These graphs show the most recent activity on the marketplace. The average gross yield graph is reported weekly and shows a rolling two week average of gross yields. This calculation assumes you reinvest your interest each month and therefore includes the compound interest you earn. Number of loans and value of loans are reported weekly. The dates on the graph should be read as ‘week beginning’, for example: 14-Jul represents the week of 14th – 20th July.

Weekly average gross yield (2 weeks rolling)

yield2

Number of listed loans per week

number

Listed loan value per week

value

We’ve raised $65m to help improve your Funding Circle experience

We’re delighted to announce that we have raised $65 million in equity funding, to improve our offering for both borrowers and investors. We’re also pleased to announce that Bob Steel, who is currently CEO of Perella Weinberg Partners, will join our board as a non-executive director.

Did you lend to fashionable polo retailer, Pampeano?

Earlier this year, Pampeano, a retailer of own-label polo equipment and handmade leather belts, took out a business loan from 415 people to help fund their growth. You can watch their story on our blog.

Summer special: share £100 with a friend!

If you recommend a friend to Funding Circle and they lend at least £1,000 to businesses, you could each have £50 cashback* paid into your Funding Circle accounts.

Loans defaulted last week

Taxi company. Loan ID 1287

This Loughborough business has been trading since 2002 and has fallen into arrears. The original loan amount was £30,000 and all affected investors have been notified.

Animation business. Loan ID 3781

This Caernafon business has been trading since 1992 and has ceased trading. The original loan amount was £15,000 and all affected investors have been notified.

Welding business. Loan ID 2889

This Worcester business has been trading since 2010 and is in arrears with their repayments. The original loan amount was £20,500 and all affected investors have been notified.

 

Our collections and recoveries team are working to recover the outstanding amounts for all of these loans.

Enjoy lending, The Funding Circle Team

 

*Terms and conditions apply.

 

Did you help this polo business access funding?

From Argentina to John Lewis: Pampeano’s Argentine leather belts hit the high street

Earlier this year we met Jenny Brown, founder of polo retailer Pampeano, who borrowed £30,000 from 415 people through Funding Circle.

Pampeano, located in Dorton, near Aylesbury, supplies the majority of UK polo retailers with own label polo equipment. They also design fashionable handmade polo belts, made from Argentine leather.

Having set up Pampeano in 2008, Jenny has successfully grown her business over the years and has recently secured a contract with major UK department store, John Lewis. Pampeano belts are now on sale at some of their stores and online.

Their business loan has helped them buy the stock needed to fulfil this contract, and will fuel their growth even further.

In this short video, Jenny shares her business story and what she liked about her Funding Circle experience. She is determined to grow the brand over the coming years so watch out, you may hear more about Pampeano soon!

 

If you want to lend to businesses like Jenny’s, or you run a business and need funding, you can sign up here.

There are many more businesses who have accessed finance through Funding Circle, and you can view their stories here.

 

Funding Circle raises $65m in equity funding and announces Bob Steel as new board director

Today we’re delighted to announce that we have completed a $65 million series D investment, led by Index Ventures, along with existing investors, Accel Partners, Union Square Ventures and Ribbit Capital. This latest round of funding will help us to continue to improve our offer for both borrowers and investors; helping more businesses borrow in the US and UK, and improving the investment experience for all of our investors.

We’re also pleased to announce that Bob Steel will join our board as a non-executive director. Bob is currently CEO of Perella Weinberg Partners and his expertise and experience is unparalleled. As former Under Secretary for Domestic Finance of the United States Treasury, former CEO of Wachovia, vice chairman of Goldman Sachs and Deputy Mayor of New York, we are very excited to be welcoming Bob to the team.

You can read the full press release for today’s news in our media centre. This news follows the last round we raised in October last year, which allowed us to expand into the US and helped us to tailor our loans for small businesses who develop or invest in property. Since launching in the US at the end of 2013, the Funding Circle US team has increased its lending to American businesses by 500 percent and is expected to lend $100 million by the end of 2014.

Globally, investors have now lent more than half a billion dollars of lending to over 5,000 businesses and we believe this is just the beginning. Thank you to all investors for your support over the last few years – you are helping to build a better financial world.

We are talking about today’s news on our forum, so come and join the conversation.

The Funding Circle team

 

Helping more businesses and £6m of new loans. Weekly Lending Review

Week 28: 7 – 13 July 2014

It was a great week for listings as 109 new lending opportunities became available to you, with the total value of over £6 million. Of the loans that were listed last week, manufacturing was the most common sector and working capital was the most popular reason for funding.

New loans

There were 109 new business loans listed last week and there are currently 84 auctions on the marketplace.

The total value of the new listed loans was £6,171,580; that’s an average of £56,620 per loan. The largest loan value was £370,000 and the smallest loan value was £5,000.

Business loans still available for bidding on for the next 3 days or more:

Weekly marketplace trends

These graphs show the most recent activity on the marketplace. The average gross yield graph is reported weekly and shows a rolling two week average of gross yields. This calculation assumes you reinvest your interest each month and therefore includes the compound interest you earn. Number of loans and value of loans are reported weekly. The dates on the graph should be read as ‘week beginning’, for example: 7-Jul represents the week of 7th – 13th July.

Weekly average gross yield (2 weeks rolling)

yield

Number of listed loans per week

number

Listed loan value per week

value

Summer special: share £100 with a friend!

If you recommend a friend to Funding Circle and they lend at least £1,000 to businesses, you could each have £50 cashback* paid into your Funding Circle accounts.

Update to minimum bid rates

We review the minimum bid rates in the middle of every month to decide whether they should be changed or kept the same. A number of factors are considered when reviewing the rates, including general economic conditions and costs of alternative borrowing products. This month, we have decided to increase rates by 0.1% on both the C and C- risk bands. The new rates will take effect on Friday 1st August. The new minimum bid rates for loan requests listed after 9am on 1st August are as follows:

  • A+: 6% (no change)
  • A: 8% (no change)
  • B: 9% (no change)
  • C: 10.2% (+ 0.1%)
  • C-: 12% (+ 0.1%)

Planned business advisory service for our borrowers

We’re planning to launch a free advisory service for Funding Circle borrowers, to help them make the most out of their Funding Circle loan. This will include a 60-90 minute session from a Funding Circle account manager and an independent business advisor of their choice, to look deeper into any business need they’d like to focus on.

Assessing more businesses on a case by case basis

As part of our ongoing work to improve and innovate the service we provide to both borrowers and investors, we are starting to review loan applications where the business has a turnover between £50k and £100k.

Loans defaulted last week

Film equipment provider. Loan ID 2009

This Guildford business has been trading since 2005 and entered administration last month. The original loan amount was £100,000 and all affected investors have been notified.

Our collections and recoveries team are working to recover the outstanding amounts for all of these loans.

Enjoy lending, The Funding Circle Team

*Terms and conditions apply.

 

Make the most out of your loan and use our free advisory service

At Funding Circle our passion is to help small businesses succeed and prosper, and help investors earn attractive returns. Over 5,000 businesses have now accessed finance via the marketplace, but often this access to capital is just the beginning.

Biz advisory

After speaking with many of you over the last four years, we know that most businesses regularly review their management information. However time pressure can make other things such as the business strategy, competitive edge, value creation, revenue streams, marketing, financial health, staff morale and management competency, easy to overlook.  

The good news is these things can be easily reviewed and improved if you know which questions to ask and some easy steps to take.

That’s why we are trialling a new and free business advisory service, for small businesses who feel they would benefit from independent professional business advice. These 60-90 minute sessions will take place with a Funding Circle account manager and an independent business advisor from a professional transformation organisation. In a recent Funding Circle survey, 92% of business owners said they would be interested in this service.

Who are the advisors?

We have a panel of four advisors to choose from including Baker Tilly, BDO, FRP Advisory, and ReSolve Partners. If you feel your business could benefit from this service, then the first step would be to get in contact with us, so we can discuss your position and agree which advisor would best suit you.

What information would you need to provide?

The more information you are able to provide in advance of the consultation, the better.

The minimum information is the completion of a SWOT analysis, which is a structured planning framework that identifies the business’ Strengths, Weaknesses, Opportunities and Threats. This should take about 15 minutes to fill out.

Ideally you could share the most up to date cash-flow forecast and management accounts. We can send you a generic 13 week short-term cash flow model that will help you prepare one for your business. Other information that would be useful, is a business plan, debtor ledger and a creditor ledger as these can be helpful in identifying and prioritising payment and debtor collections to improve cash flow.

Is there any obligation on me to have a meeting?

No obligation whatsoever.  However, this opportunity will enable us to develop a closer relationship with you and gain a better understanding of your funding needs, which may be useful in the future.

Why are we offering this service?

We want to see borrowers become successful and make the most out of their loan. We believe that this free service can help borrowers be better at business; and help you avoid, or plan for, any difficulties that may lie ahead. Meeting you in person and seeing your business will also help us gain a better understanding of your business needs.

Things to note

It’s worth mentioning that any information provided to us is treated with the strictest confidence and shall not be disclosed to any third parties without your express consent. The service will initially be trialled with businesses who have £50k outstanding on their loan and are ideally based in London and the South East, but we hope to roll it out more widely in due course.

How to get started

Contact us by emailing Vijay Chadha, who is running this trial service, or by calling 0203 667 2225.

Assessing more businesses on a case by case basis

Last month we revisited how we assess the types of security required for business loans, and removed the £150k threshold for loans without asset security. As mentioned, this will give our credit team more flexibility to assess the security required on a case by case basis.

As part of our ongoing work to improve and innovate the service we provide to both borrowers and investors, we will also start to review loan applications where the business has a turnover between £50k and £100k.

Previously we have considered loans for businesses who have around £100k turnover. However, as the marketplace grows, we are seeing an increasing number of businesses with a lower turnover and a high profit margin, that would pass our affordability check and our credit assessment.

These kinds of businesses are typically service companies, such as accountants or consultants, who have previously not been able to borrow through Funding Circle due to their lower turnover figure.

It’s important to note that we will always assess a business’s ability to repay a loan, and only list those that pass our credit assessment. Having the flexibility to consider businesses with a lower turnover will allow us to look at companies who have performed consistently well.

An example

Company A has been trading for 6 years, consistently turning over £60k with a profit of £25k.

Company B has 2 years filed accounts. The first shows a turnover of £6k with a loss of £100k, and the second year shows a turnover of £51k and a profit of £2k.

Company A is much more likely to be approved than Company B.

If you have any questions about this, please visit our FAQs or join us on our forum where we will be happy to discuss this in more detail.

Summer promotion: share £100 cashback! Weekly Lending Review

Week 27: 30 June – 6 July 2014

Summer is here and to celebrate, we’re running a special recommend a friend promotion. If you recommend a friend to Funding Circle during July and August and they lend at least £1,000 to businesses, you could share £100 cashback* with them. Start recommending today!

There are currently 50 lending opportunities available to you, including a property investment loan for £520,000 that’s currently on the marketplace with 2% cashback available on every successful bid.

New loans

There were 77 new business loans listed last week and there are currently 60 auctions on the marketplace.

The total value of the new listed loans was £4,266,320; that’s an average of £55,407 per loan. The largest loan value was £220,000 and the smallest loan value was £5,000.

Business loans still available for bidding on for the next 3 days or more:

Weekly marketplace trends

These graphs show the most recent activity on the marketplace. The average gross yield graph is reported weekly and shows a rolling two week average of gross yields. This calculation assumes you reinvest your interest each month and therefore includes the compound interest you earn. Number of loans and value of loans are reported weekly. The dates on the graph should be read as ‘week beginning’, for example: 30-Jun represents the week of 30th June – 6th July.

Weekly average gross yield (2 weeks rolling)

yield

Number of listed loans per week

number

Listed loan value per week

value

News you should know

Last month’s top industry news

In this month’s news roundup, we announced our partnership with Santander, the largest global peer-to-peer lender, and a consultation into the peer-to-peer ISA.

Keep lending using our iOS App

We’ve just updated our iOS app to allow you to transfer funds into your Funding Circle account, so you’ll never miss out on an auction again. If you haven’t got the app yet you can download it here. Happy bidding!

Loans defaulted last week

No loans were defaulted.

Enjoy lending, The Funding Circle Team

 

Tie-up with Santander and Lending Club IPO. June industry news

Newspapers - Copy

Santander in peer-to-peer pact as alternative finance makes gains

In a sign that marketplace lending continues to march further into the mainstream, we launched a new partnership with Santander last month. The referral arrangement will see Santander proactively refer small business customers looking for a loan to Funding Circle, where we are better placed to help. The exciting new partnership is the first between a UK bank and an online finance provider, and will give thousands of small British businesses greater access to finance, whilst bringing more lending opportunities to the marketplace. More information can be found on our blog, the Evening Standard and Reuters.

Lending Club IPO seeks $5bn valuation

The world’s biggest peer-to-peer consumer lender, Lending Club, is preparing to raise more than $500m from a US initial public offering in what would be a landmark moment in the rapid growth of the industry. The San Francisco-based company has chosen Morgan Stanley and Goldman Sachs to lead the offering, which could come as early as the third quarter of the year, with proceeds from a stock market listing intended to help fund its growth.

Treasury set to launch peer-to-peer ISA consultation next month

The inclusion of peer-to-peer lending within ISAs continued to pique interest in June. The Treasury is poised to launch a consultation next month on how investors might gain access to the peer-to-peer lending market through individual savings accounts – and whether a new type of ISA should be created for the purpose. Funding Circle is part of the steering group working with government to finalise the exact mechanism and timings. We’re expecting the process to take a further six to eight months.

First p2p scheme through a Sipp

Personal pension owners can now invest in peer-to-peer lending through a partnership struck between a peer-to-peer lending platform, a pension provider and financial portal SippClub. The new venture enables self-invested personal pensions (Sipps) to include peer-to-peer lending within the tax-efficient wrapper. This is something we are working hard to allow investors to do. The Daily Telegraph also discusses the improvements that could be made to the way returns are paid out, in order to make peer-to-peer lending an attractive source of income for pensioners who wish to avoid annuities.

First peer-to-peer firm fails – but savers are repaid

Following the introduction of regulation on 1 April, a peer-to-peer lender Yes-secure, has shut down, but has promised a full refund of outstanding loans to all investors. The Financial Conduct Authority requires all peer-to-peer lenders to meet strict capital requirements and show detailed plans of how the contracts would be enforced should a company go bust. All companies belonging to the Peer-to-Peer Finance Association have had these requirements in place for a number of years in the run up to formal regulation.

Ambic furniture company looks to expand beyond Newcastle

One of our borrowers, Ambic, featured in the Times, in an article about overcoming the issue of cash flow. The educational furniture manufacturing company had relied on a bank overdraft over the busy summer months, until the recession kicked in. The director, David Potter, took the decision to try Funding Circle and within two weeks, he received his £100,00 loan funded by 1,277 of you

And finally, whilst it’s not technically industry news, we couldn’t help but include this article in the Evening Standard ahead of Ping Pong Fight Club last month. Following last year’s victory, we descended on Shoreditch to retain our ping pong title against the rest of London’s tech scene.

Jenny shares her top business tips

Last month we met Jenny, founder of Pampeano, who borrowed £30,000 from 415 people through Funding Circle earlier in the year. Pampeano is a retailer of own label polo equipment, including their handmade polo belts made from Argentine leather.

Having set up Pampeano in 2008, Jenny has grown her business to a stage where she has now secured a contract with major department store, John Lewis. Their business loan helped them buy the stock they needed to fulfil this contract, and will fuel their growth even further.

We caught up with Jenny and asked her to share some of her top business tips.

1. Manage your cashflow

Managing your cashflow is key to maintaining your reputation with customers. Ensure you have the capital to fund your inventory, so you’ll always be able to supply your goods.

2. Keep at it

There will be moments when you doubt yourself, but keeping working hard.

3. Be innovative

As a small business, you’ll need to manage your budget carefully. Try to be innovative and find different ways of marketing and staffing your business.